And the best loyalty program goes to… Coles

Coles’ Flybuys loyalty scheme is the most popular loyalty program in Australia, with Woolworths’ Everyday Rewards coming in a not-so-close second, according to a new report into customer loyalty schemes.

The figures come from a survey of 1000 Australians conducted by marketing insights company Directivity and digital agency Citrus called For Love or Money: 2013 Consumer Study into Loyalty Programs.

Findings revealed a landslide 37% of respondents said Coles was doing a “particularly good job” with its Flybuys loyalty program, while 22% said the same of Woolworths.

Qantas Frequent Flyer program came in third (11%), followed by MyerOne (6%), Priceline (5%)and Virgin (2%). CBA Credit Card, IGA, Millers, Rewards Central, Spotlight were also commended by 1% of respondents.

The study aimed to find out whether being a member of a loyalty scheme influenced consumers’ buying behaviour. It explores the penetration and popularity of loyalty programs in Australia, investigates what make up the key elements of a successful program, and how consumers like to be communicated to.

According to the report, around 80% of consumers buy more from companies whose programs they are members of, while 55% will choose a product or a company with a loyalty program, over one without.

Furthermore, 88% of interviewees said they belonged to a loyalty program and 46% said they felt more loyal to a brand because of a loyalty program.

Men are members of fewer programs (average three) but more active with the memberships, presenting their card at the point of purchase or actively looking to accrue points.

Women are members of more programs (average five) and tend to spread their spend across more programs. Consumers over 55 tend to buy more, choose from brands that have a program, but believe more strongly that programs don’t provide any real value.

Financial benefits are still the most sought after program benefit, with 80% of consumers seeking immediate price discounts when making purchases.

Points-based programs that enable members to redeem points for vouchers or other rewards are also important (77%). Exclusive offers (64%) and access to more rewards based on spend (62%) also rank highly with consumers. Tiered loyalty programs whereby consumers compete for status points (bronze, silver, gold) were found the least popular and least effective.

One young male respondent from Tasmania said: “Offers that have an immediate discount are better than non-tangible and confusing schemes such as points.” This sentiment was echoed across the board.

Over 80% of respondents said personalised email is by far the most preferred channel to communicate with members, followed by direct mail (37%).

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